Investor Presentation March, 2018
Disclaimer This material has been prepared exclusively for informational and promotional purposes. Its intention is to inform about the business strategy of Tatry mountain resorts, a.s., with its registered office at Demänovská Dolina 72, Liptovský Mikuláš 031 01, Identifications Number: 31 560 636, registered in the Commercial Registry of District Court of Žilina, Section: Sa, Insertion No. 62/L (hereinafter referred to as TMR ). TMR s shares are listed on the parallel market of the Bratislava Stock Exchange and on the main markets of the Prague Stock Exchange and the Warsaw Stock Exchange. The company s share capital consists of 6 707 198 bearer shares booked on the bearer with a nominal value of 7 per share. TMR has been allocated ISIN SK11 20010287. Information contained in this material is based on historical data and may contain forecasts of future performance. Predictions are based on rational expectations supported by objective data. Predictions are not reliable indicators of future performance and they are not binding. TMR is not liable for any of the predictions contained in this material. Future figures of TMR can differ from predictions given in this presentation. This material is owned exclusively by TMR. Any distribution, duplication, publishing, copy or record of this information, or any part of it contained in this material is forbidden without prior approval oftmr. Any distribution of this presentation or any part of it beyond the territory of the Slovak Republic can be either restricted, or prohibited by law of the third state. 2
3 We are here to revolutionize tourism in Central Europe!
TMR at a Glance Leading and the only Alpine style mountain tourism services provider in the CEE region Natural monopoly no mountains comparable to the Tatras in the region Increasing quality with infrastructure investments of EUR 300 million during the last 11 years Significant (double digit) increases in revenues (cum. 111%) and EBITDA (cum. 122%) in the last 5 years as a result of investments, acquisitions, and strong pro-customer orientation 4
TMR s Strategy Who We Are and What We Do 5
Our Potential Long History of Tourism in the Tatras Cultural and Natural Heritage 6
Challenges Mountain Resorts in 2005 7
Who We Are Today 8
Business Model Overview Revenues by Segments* 6,1% 23% I. MOUNTAIN & LEISURE Segment (M&L) Mountain Resorts 4 resorts in the High and Low Tatras (SK), Poland (97%), and Czechia Leisure Parks Aquapark Tatralandia (SK) Legendia - Silesian Amusement Park (75%, PL) Dining over 40 dining facilities on and off the slopes and in the leisure parks Sports Stores & Services Tatry Motion, Szczyrk Motion Over 30 stores, ski schools, sports gear rentals 71% M&L Segment Breakdown 20% 18% II. HOTELS Segment 12 owned and/or managed hotels Over 800 rooms and 2,000 beds Luxurious wellness spa facilities Ongoing hotel upgrades, additions III. REAL ESTATE Segment 4 hotels leased to third parties Sale of recreational real estate Holiday Village Tatralandia, Chalets Jasná de Luxe Center, Hotel Pošta 9% 53% Mountain Resorts Leisure Parks Dining Sport Services & Stores 9 M&L Hotels Real Estate * FY 2016/17
Mountain Resorts Vysoké Tatry (The High Tatras, SK) Tatranská Lomnica Starý Smokovec Štrbské Pleso 24 km of ski trails 20 cableways and lifts Max. transportation capacity of more than 21,385 persons/hour 20 km of ski trails with snowmaking Summit elevation: 2,625 m a.s.l. Base elevation: 805 m a.s.l. Vertical drop: 1,820 m 9 dining facilities Tatry Motion stores & services Jasná Nízke Tatry (The Low Tatras, SK) Chopok North Chopok South 50 km of ski trails 27 cableways and lifts Max. transportation capacity of 31,784 persons/hour 35.5 km of ski trails with snowmaking Summit elevation: 2,004 m a.s.l. Base elevation: 880 m a.s.l. Vertical drop:1,124 m 13 dining facilities Tatry Motion stores & services
Mountain Resorts Szczyrk mountain resort (Beskids, PL) Ještěd (CZ) 97% interest Leased for10+ years Completed investments of EUR 35m Planned investments of more than CZK 600m 23 km of ski trails 9.2 km of ski trails 13 cableways and lifts 3 cableways, 5 lifts Max. transportation capacity of 22,000 persons/hour Max. transportation capacity of 11,095 persons/ hour 15 km of ski trails with snowmaking 7.8 km of ski trails with snowmaking Summit elevation: 1,211 m a.s.l. Summit elevation: 944 m a.s.l. Base elevation: 620 m a.s.l. Base elevation: 541 m a.s.l. Vertical drop: 591 m Vertical drop: 403 m Szczyrk Motion stores & services
Leisure Parks Aquapark Tatralandia (Liptov, SK) 14 (10 year-around) swimming pools with thermal, sea, and clear water 21 steam, water and masage saunas, baths and procedures 26 toboggans and waterslides (6 year-round) and 300 other attractions Tropical Paradise, Wellness Paradise, Funpark Tatralandia, Hurricane Factory, Tatrapolis Legendia - Silesian Amusement Park/ Śląskie Wesołe Miasteczko (75%, PL) Location: Park Śląski (Silesian Park) at Chorzów, PL Completed investments of EUR 26m Area: 26 ha 50 attractions The largest and oldest park in Poland A 40m high roller coaster Lech Coaster Lodging HolidayVillage Tatralandia 7 dining facilities 12
Hotels Hotels - The High Tatras Grandhotel****, Starý Smokovec Grandhotel Praha****, Tatranská Lomnica Hotel FIS***, Štrbské pleso Mountain hotel Hrebienok Hotel Kukučka**** (managed) Hotels The Low Tatras Wellness Hotel Grand Jasná**** Chalets Jasná De Luxe**** Tri Studničky Hotel**** Holiday Village Tatralandia Hotel Srdiečko** Hotel Rotunda Hotel Pošta 13
Real Estate Lease of hotels and lodging facilities to third parties Hotel Liptov Hotel Ski & Fun Záhradky Sale of recreational real estate Holiday Village Tatralandia Chalets Jasná de Luxe Center construction, sale, operation Kosodrevina Lodge Otupné Hotel Pošta construction, sale, operation 14
Our Market Potential Natural monopoly position (no other similar places in the region to provide the Alpine resorts feel except for the Tatras) Long history of resorts in PL, CZ No competition within 1000 km east of TMR resorts 64 million people living in key target countries Long tradition of visitors from CEE Easy access by plane 7% TMR Mountain Resorts Visitors in SK During Winter 2016/17 3% 8% 14% 68% Slovakia Poland Czech Rep. Hungary Other 15 More affordable than Alpine resorts Target Groups (through): Slovaks (massive marketing campaigns) Polish (massive marketing campaigns) Czech (still benefiting from the common past; no language barrier) Russian-speaking (driving distance unlike Alpine resorts) New markets (Baltic & UK via new airline connections) Segmentation Affluent clientele Luxury and prestige of the hotels in the High Tatras Mainstream Jasná, Nízke Tatry tailored to the young, families, and sports enthusiasts
Thousands Great Potential in Regional Mountain Tourism Skiers by Country 16 000 40% 14 000 35% 12 000 30% 10 000 25% 8 000 20% 6 000 15% 4 000 10% 2 000 5% 0 Slovakia Poland Czech Republic Ukraine Russia Austria Switzerland Germany 0% No. of National Skiers Skiers as % of Population 16 Source: Vanat, Laurent. 2017 International report on mountain tourism
The Tatras Client Target Area in SK, Neighbors, and East Ještěd 17
Our Strategy Based on 3 Pillars Increasing quality with investments Strategic acquisitions and expansion of operation in CEE Constant operations & services enhancement EUR 295 million over 11 years New modern cableways Renovating hotels Expanding resorts Capitalizing on completed investments Modernization of Szczyrk and Legendia 18 Aquapark Tatralandia 2011 Špindlerův Mlýn ski resort (9.5%, CZ) Korona Ziemi (7%, PL) Szczyrk ski resort, PL 2014 Legendia - Silesian Amusement Park (75%, PL) 2015 Planned acquisition of an alpine resort Enhancing customer experience through synergies Focus on affluent clientele Trendsetter in the region Quality management GOPASS loyalty program and e-shop Innovative technologies
thousands thousands Our Assets Grow through Capital Investments Total of EUR 300m invested into development of our resorts and hotels in the last 11 years 2013 ends Investment phase I The New Era of the Tatras EUR 190m invested into growth of the Tatra resorts The New Era of Szczyrk EUR 35m invested in phase I till the end of 2017, another EUR 30m planned The New Era of Legendia EUR 30m completed investments CZK 600m (EUR 24m) planned investments into the development of the Ještěd resort 400 000 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 120 000 100 000 80 000 60 000 40 000 20 000 0 Fixed Assets 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 CAPEX vs Revenues 2012/13 2013/14 2014/15 2015/16 2016/17 Revenues Capex 19
EUR 300 million CAPEX in last 11 years Funitel Jasná Nízke Tatry Tropical Paradise Tatralandia 20 15-seat Kosodrevina, Chopok, Jasná Nízke Tatry Tropical Paradise Tatralandia
EUR 300 million CAPEX in last 11 years Surf Wave, Aquapark Tatralandia Chalets Jasná de Luxe**** Rotunda, Jasná 15-seat gondola, Vysoké Tatry 21
Quality in Business and Marketing - CRM Customer Card Ski Pass Direct Marketing Sales Channel A customer card offering customized products: Accommodation - Ski Pass - Dining - Aquapark - Rental - Ski School A personalized online ski pass / aqua pass at more favorable rates without queuing at cash desks Registration takes just 2 minutes For purchase bonus points loyalty program A direct marketing tool An efficient sales channel www.gopass.sk 27% of all skier days sold in Jasná and VT in 2015/16 Mobile app GOPASS 22
Operational Overview What We Have Achieved and How 23
What Drives Our Revenues KPIs Revenue Growth 24
Occupancy (%), Price (EUR) Thousands Stable Growth in Annual KPIs, Increased Visit Rate 16/17 Also Thanks to Strong Winter Season 3 500 3 000 2 500 2 000 1 500 1 000 500 0 Visit Rate in Mountains and Leisure* 2012/13 2013/14 2014/15 2015/16 2016/17 16 14 12 10 8 6 4 2 0 Average Revenues per Visitor** 2012/13 2013/14 2014/15 2015/16 2016/17 Mountain Resorts Leisure Parks Leisure Parks Mountain Resorts Dining Sports Services & Stores KPIs of Hotel Portfolio 80 70 60 50 40 30 20 10 0 2012/13 2013/14 2014/15 2015/16 2016/17 Occupancy (%) ADR (EUR) 25 * Silesian Amusement Park was acquired on 01/05/2015 ** per given period fiscal year
thousands avg. price in resorts Jasná and Vysoké Tatry Extensive CAPEX Justify Increasing Ski Pass Prices Annual increase of ticket prices is justified with extensive CAPEX invested into development of TMR resorts and hotels Mountain Resorts 5-year cumulative growth: Operating revenues +94.7% Average ticket price +28.1% Mountain Resorts 5-year CAGR: Operating revenues* +14.3% Average ticket price +5.1% 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 Pricing vs. Revenues of Mountain Resorts 2012/13 2013/14 2014/15 2015/16 2016/17 Revenues 1-day Ticket Price in Main Season 37 36 35 34 33 32 31 30 29 28 27 26
1-day Ticket Price ( ) Strategic Product Position, Closing in on Alpine Resorts 65 Market Positioning in Europe in Winter 2016/17 60 55 50 Trails (km) Gastein, 86 Livigno, 115 Ischgl, 238 45 40 35 30 25 20 Stubaier Gletcher, 62 PKL / Kasprowy Wierch, 16 Jasná - TMR, 50 Vysoké Tatry - TMR, 24 Špindleruv Mlýn, 25 Pec pod Sněžkou, 15 Białka Tatrzańska, 17 Szczyrk, 25 Val Gardena, 175 15 0,000 20,000 40,000 60,000 80,000 100,000 120,000 Capacity ('000 persons/hour) 27
Financial Overview How We Look Like in Numbers 28
thousands Growth Results Confirm Our Strategy 120 000 Key Operating Results Plan 40% 100 000 95 910 35% 32,9% 80 000 30% 60 000 25% 40 000 31 516 20% 20 000 15% 0 2012/13 2013/14 2014/15 2015/16 2016/17p 2016/17 Revenues EBITDA EBITDA Margin 10% 29
thousands thousands Operating Results by Segments Revenues EBITDA 120 000 100 000 CAGR +16% 35 000 30 000 CAGR +17% 25 000 80 000 20 000 60 000 15 000 40 000 10 000 20 000 5 000 0 2012/13 2013/14 2014/15 2015/16 2016/17 0 2012/13 2013/14 2014/15 2015/16 2016/17 Mountain Resorts Dining Hotels Leisure Parks Sports Services & Stores Real Estate Mountain Resorts Dining Hotels Leisure Parks Sports Services & Stores Real Estate 30
thousands Financial Position 31 Liquidity Cash & cash equivalents EUR 9.6m Assets Total assets EUR 438.0m Fixed assets EUR 333.7m Level of Debt Total debt EUR 279.3m Total debt-to-capital (D/C) ratio 71.2% Bonds issued EUR 184.8m used to finance share capital decrease Bank debt EUR 94.5m Equity Total equity EUR 113.1m Share capital EUR 47.0m 500 000 450 000 400 000 350 000 300 000 250 000 200 000 150 000 100 000 50 000 0 Assets Breakdown as of 31/10/2017 Current Assets 19,4% Other Non- Current Assets 4,4% Financial Position Fixed Assets 76,2% Total Assets Fixed Assets Debt D/C 72% 71% 70% 69% 68% 67% 66%
Overall Financial and Market Performance 28 28 27 27 26 26 25 25 24 24 23 23 TMR Stock Performance at BSSE Key Cons. Data in EUR FR 2016/ 17 FR 2015/ 16 FY 2014/ 15 FY 2013/ 14 FY 2012/ 13 Revenues 95.9m 81.2m 70.9m 56.3m 54.3m EBITDA 31.5m 25.1m 24.4m 18.4m 18.6m Net Profit 7.0m 2.7m -0.8 0.7m 6.6m EBITDA margin 32.9% 30.9% 34.4% 32.7% 34.2% EPS 1.10 0.46-0.10 0.11 0.98 D/E ratio 246.9% 216.8% 215.3% 223.0% 210.0% TMR Market Overview at BSSE*: One-year max.: EUR 27.30 One-year min.: EUR 24.20 One-year return: 11.9% Dividend yield: N/A 32 * As of 31/10/2017
Outlook & Future Growth Where We Go from Here 33
Strategic Goals for Medium Term Investments in development of the Czech and Polish operations: Silesian Amusement Park EUR Szczyrkowski ošrodek narciarski EUR 30m in phase II Ještěd CZK600m Increasing quality with investments Acquisitions and expansion of operations in the region Operation/ acquisition of mountain resorts and leisure parks in Czechia and Austria Awakening of real estate market in the Tatra region Chalets Jasná de Luxe Holiday Village Tatralandia Jasná Center Growing potential in real estate projects Focus on quality improvement in our resorts Customer loyalty program GOPASS Client Relationship Management Add ancillary services Hotel upgrades Hotel capacity addition (Jasná)
Appendices Shareholder Structure Key Operating Results Consolidated Income Statement Financial Position 35
Shareholder Structure TMR is listed on 3 stock exchanges Bratislava, Prague, Warsaw 9,5% 8,8% 23,5% 9,9% 13,4% 15,4% 19,5% Retail investors <5% C.I. CAPITAL INDUSTRIES LIMITED FOREST HILL COMPANY, s.r.o Nikroc Investments Limited KEY DEE LIMITED TINSEL ENTERPISES LIMITED RMSM1 LIMITED * As of 31/10/2017
Key Annual Operating Results by Segments Key Operating Results Revenues EBITDA in '000 2016/17 2015/16 Change yoy (%) 2016/17 2015/16 Change yoy (%) Mountains & Leisure 67 789 60 449 12,1% 24 324 19 593 24,1% Mountain Resorts 36 214 34 120 6,1% 15 410 12 510 23,2% Leisure Parks 12 473 10 527 18,5% 4 724 3 735 26,5% Dining 13 302 11 132 19,5% 3 071 2 402 27,9% Sports Services & Stores 5 800 4 670 24,2% 1 119 946 18,3% Hotels 22 265 19 910 11,8% 4 859 4 402 10,4% Real Estate 5 855 843 594,5% 2 333 1 116 109,1% Total 95 910 81 202 18,1% 31 516 25 111 25,5% 37
Consolidated Income Statement Selected Consolidated Results (IFRS) For the Year Ended October 31 in '000 2016/17 2015/16 Sales 95 683 80 577 Other Operating Revenues 227 625 Total Revenues 95 910 81 202 Cost of Sales -16 393-13 062 Personnel and Operating Costs -49 063-43 671 Other Gain/ Loss 1 062 642 EBITDA 31 516 25 111 EBITDA Margin 32,9% 30,9% Depreciation & Amortization -13 828-13 036 EBIT 17 688 12 075 Interest Income 2 058 1 336 Interest Expense -12 094-10 958 Income from Financial Instruments, net 169 1 605 Pre-tax Income 7 821 4 058 Income Tax -831-1 312 Net Profit 6 990 2 746 Total Comprehensive Income 7 146 2 671 EPS ( ) 1,099 0,456 38
Financial Position October 31 Financial Position in '000 2016/17 2015/16 Total Assets 437 972 375 701 Non-current Assets 353 128 308 365 Fixed Assets 333 718 283 133 Other Non-current Assets 19 410 25 232 Current Assets 84 844 67 336 Liquid Assets 9 584 7 493 Equity 113 149 106 003 Liabilities 324 823 269 697 Non-current Liabilities 286 277 239 197 Current Liabilities 38 546 30 500 Total Debt 279 320 229 804 39